Transcript 0170133869_208806

Sample Student
Presentation Slides
Strategic Management
Case Analysis
Dr. Paul N. Friga
2005
Overview of Document
• This slide deck exemplifies a student presentation
of the analysis of a case study for a general
management or strategic management course
• The case used in this study is: Singapore
International Airlines: Strategy with a Smile
(Thunderbird, 2001)
• There are multiple ways to present a case story –
this is only one example
• The storyline is presented first, followed by the
supporting data for the high-level conclusions
Singapore Airlines is in a tough
situation but opportunities for global
leadership exist
• Singapore International Airlines (SIA) is facing
dramatic environmental shifts, increasing
competition, and changing customer demand
• Several strategic options exist related to how
SIA can improve its competitive positioning for
the long term
• I recommend that SIA pursue a high-end
differentiation strategy based upon unique
positioning as the ‘premier long-distance
airline’
Singapore Airlines is in a tough
situation but opportunities for global
leadership exist
• Singapore International Airlines (SIA) is facing
dramatic environmental shifts, increasing
competition, and changing customer demand
• Several strategic options exist related to how
SIA can improve its competitive positioning for
the long term
• I recommend that SIA pursue a high-end
differentiation strategy based upon unique
positioning as the “premier long-distance
airline”
The environmental analysis
suggests some important issues
General Environment:
•Globalization is increasing demand for international air travel (esp. to Asia)
•Political changes include the increase of free trade markets (like Singapore)
•Economic conditions are important as recessions cause price sensitivity
External
What is really
important?
Internal
Industry:
•Consolidation in the airline industry is increasing to enhance scale and scope
•Alliances are the hottest strategy tool as companies seek global connections
•Customers are increasingly price sensitive but business segments are loyal
•There are little to no substitutes for international air travel
Competition:
•Key domestic competitors are Japan Airlines, Thai Airways, and Cathay
•Key international competitors are United, KLM, and British Airways
•SIA has the best cost structure for premium level service but losing ground
Strengths:
•Reputation and brand image of the “Singapore Girl”
•Young fleet and excellent training facilities and programs
•Extensive regional and international route network
Weaknesses:
•Increasing difficulty supplying high quality labour at low costs (esp. Singapore)
•“Buttoned Down” image may not be attractive to younger demographic
•High cost structure needed for high quality service is difficult to change
SIA is the largest Asia-Pacific
airline
Capacity (Available Ton Kilometres)
20000
15000
10000
5000
0
1999
SIA
Cathay
Source: Singapore International Airlines Case – pp.
Qantas
Thai
Malaysia
Singapore Airlines is in a tough
situation but opportunities for global
leadership exist
• Singapore International Airlines (SIA) is facing
dramatic environmental shifts, increasing
competition, and changing customer demand
• Several strategic options exist related to how
SIA can improve its competitive positioning for
the long term
• I recommend that SIA pursue a high-end
differentiation strategy based upon unique
positioning as the ‘premier long-distance
airline’
There are three key questions
that should be addressed
Question
Option /
Hypothesis
Decision
Criteria
Pros
Cons
Invest in VA?
Yes
Return on
Investment
•Enables a lower
cost product
offering
•Access to younger
demographic
•Complimentary
routes
•Competes with
Star Alliance
•Limited resources/
opportunity cost
•May affect
reputation
Overall Strategy?
Low Cost (rather
than Differentiation)
Long Term
Profitability
•Head to head with
new competitors
•Seems to be the
trend in the U.S.
•Fuel costs are
rising
•Lose reputation as
high quality
provider
•Goes against
infrastructure
•Differentiation
may be the only
way to win
Stay in Star
Alliance?
Yes
Market Share
Growth
•Cross-selling
opportunities to
new customers
•Access to
additional routes
quickly
•Lose control of
scheduling
•May compromise
the consistent
quality of service
While SIA has a higher OM,
competitors are not far behind
Operating Margin - Percentage
30
20
10
0
1999
SIA
Thai
KLM
Source: Singapore International Airlines Case – pp.
Cathay
Malaysia
United
Qantas
BA
American
Asia is projected to be a key
market moving forward
Projected Passenger Kilometres billions
1500
1000
500
0
2001
Africa
Middle East
Source: Singapore International Airlines Case – p.
L.A.
Asia
Europe
N.A.
Singapore Airlines is in a tough
situation but opportunities for global
leadership exist
• Singapore International Airlines (SIA) is facing
dramatic environmental shifts, increasing
competition, and changing customer demand
• Several strategic options exist related to how
SIA can improve its competitive positioning for
the long term
• I recommend that SIA pursue a high-end
differentiation strategy based upon unique
positioning as the ‘premier long-distance
airline’
Singapore Airlines should
strive for unique positioning
SIA should set a strategic
vision to be the leading global
premier service airline
Risks
Implementation
•Alliances don’t deliver
•Invest in VA (but go high end)
•Costs get too high
•Stay in Alliance
•Other airlines act first
•Expand high quality labour
pool
•This is a critical time as technology and global reach
require a high-end international access airline
•SIA’s best strengths are high end service and global routes
• Going low-cost will damage long-term profit potential
The growth rate through
2007 is estimated to be high
Regional Route Growth - %
8.5
8
7.5
7
6.5
6
Growth
NE Asia-SW Asia
Source: Singapore International Airlines Case – p.
Eur - NE Asia
NA - SE Asia